Company Registration in USA

usa company registration

Company Formation and Registration in United States Of America

The United States of America is the leading business hub globally and foreign nationals are always keen for setting up a start-up in US. If you are planning business expansion, then the most efficient way is to register your business in the US. The USA is world’s number one, largest, and most integrated market which offers lowest tax rate.

USA has undoubtedly been the largest and most advanced economy in the world since 1871. The US economy is one of the most developed and stands at about 20 trillion dollars, which makes it almost 14 times the Indian economy. USA is an economic superpower because of its technological advancement, world-class infrastructure and abundance of natural resources. The major contributor to the US economy is the service industry that pools in almost 80% to its GDP, whereas manufacturing contributes only 15% of its output.

As technology is rapidly advancing, shipment time is reducing across the globe and with a huge chunk of English-speaking population, businesses in India are in a strong position to explore the US market or set up a global business based there. Offering one of the lowest corporate tax rates, USA boasts of well-established business laws and practices and therefore, it is an apt choice for Indian companies and businesses who have an ambition to have a global outreach or make a foreign customer base.

In this article, we cover everything you are required to know about setting up your start-up in US, right from understanding the tax and legal compliances, benefits of doing a business there and awareness about the types of business entities you could form.

The first most important thing for company registration in USA for foreign business is to decide the business location. For this, you might have to see what is best-suited for you in terms of:

  • Demographics
  • Knowing your local competition
  • Finding the supply chain
  • Doing a comparative study of state laws and tax regulations
  • Ensuring you stick to your budget

Your final decision should meet all the pre-defined business objectives in the most efficient and cost-effective manner without letting go of your quality standards. As every business is different, thus you would need to see which factors are the most important in your case – is it accessibility to skilled labour, location or something else.

For company registration in USA for foreign businesses, in case any of the owners or Shareholders for Corporations or the Members of LLC are not US Citizens, then you can either form a Corporation (also termed as a “C-Corporation” or “Regular Corporation”) or go for an LLC. Another possible entity type is known as an “S-Corporation” in which all the shareholders have to be US Citizens.

There is no constraint on the total number of owners for a US Corporation or LLC, and also which country they are from or whether the owners are individuals or some companies (foreign or domestic corporations, LLC’s, etc.). Though, there could be some restrictions in your home country on the type of US company that is allowed to operate in that country; hence, it’s important to seek advice about your local laws and if needed contact an attorney who knows is aware of your situation and the US laws in case you are not sure of local requirements.

Limited Liability Company (LLC)

LLC is an entity that blends the features of a Corporation and Partnership. It provides the business owners with limited liability protection if there is a lawsuit or the company goes bankrupt. In addition, LLCs are also flexible operationally and the compliance requirements are simpler. For instance, in case of a Corporation, shareholder meetings and resolutions are required and it is also important that the recording and filing of forms proving that meetings were held and the voting majorities took the decisions. In contrast, LLCs don’t need annual shareholder’s meeting.

C-Corporation

If your objective is to get funding from VCs or angel investors, then setting up a C-Corporation in the USA is the most suitable option. Corporations are considered to be a lot more professional by investors, bankers, customers, employees and even suppliers. C-Corporations are typically an independent legal entity which is separate from the owners owning, controlling and managing it. Because of this consideration as an individual entity, it is regarded as a legal “person” in terms of tax laws, and can therefore, it is allowed to be engaged in contracts and business, initiate lawsuits if required and itself be sued.

Registered Agent

All Delaware LLCs and Corporations are needed to maintain or engage a registered agent in the State of Delaware who would be accountable for receiving and processing all the official mail on behalf of the Delaware company.
Once deciding which type of company to form and the state you will be establishing your company in, there are some basic requirements we need to set up your company. These are:

1. Selecting a company name
2. Providing details of a registered agent
3. Federal Employer Identification Number (Optional)
4. Apostille or Certificate of Authentication (Optional)

The US welcomes entrepreneurs from across the globe without any bias on the ground whether they are a US citizen or a foreigner. All the laws pertaining to business formation, corporate compliance and taxation are equal for everyone in the country
After your Corporation/LLC has been formed, you have to ensure completing some other important tasks depending on the requirements and the objective of your US company. They are:

1. Decide a US physical office or business address or virtual office
2. Open a US bank account
3. Open a business bank account in the home country
4. Get yourself a US phone number
5. Develop a website
6. Decide your company’s logo
7. Open a US merchant account (to accept any credit card payments)

After deciding which type of bank account would be opened by you in the US, we at IMC, would assist you in opening a USD-denominated business bank account for your newly-formed company.

  • Easier to sell in the US market
  • Lowest tax rates globally
  • Easy access to the capital markets and thus, it’s simpler to raise fund from venture capitalists
  • Quickest way to enhance the reputation of your company or business, both to US customers and to other international markets
  • Simpler to get a visa to visit and work in the US
  • Possible to decrease your tax on US-source income

Corporate Tax Rate

In the US, there are two levels of corporate income taxes which are levied on LLCs and Corporations, namely, Federal Corporate Tax and State Corporate Tax. Recently, the Federal corporate income tax rate has been cut down from 35% to 21% by The Tax Cuts and Jobs Act (TCJA).

State corporate income tax rate in the US varies from state to state. The lowest is at 3% in North Carolina and it goes up to 12% in Iowa. Delaware corporate taxes are typically levied at 8.7% of net income. But, in case a business is incorporated in Delaware but is not transacting business in the State of Delaware, then the state corporate tax would not be levied at all. Therefore, a Delaware incorporation is the most beneficial for foreigners and foreign entities who want to do business in the USA through Delaware.

Similar lower tax jurisdictions as USA include Dubai and Singapore. So in case you are considering company formation in Dubai or Singapore company incorporation, or setting up your start-up in US, do get in touch with us and we would be glad to assist.

Are you planning for a company registration in USA for foreign business? We at IMC can help you do so. You can register company in USA from India as a C-Corporation or LLC with ease through IMC Group. The best part is that for doing company registration in US, you are not required to be physically present there. The process takes less than a week and can be completed online with our assistance. So if you are planning to set up your start-up in US, do get in touch with us and we would be glad to assist.

Just drop your email id and contact number. We will get in touch with you.

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